Derivatives and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Derivatives and Fair Value of Financial Instruments

Schedule of assets and liabilities measured at fair value on a recurring basis

	Balance
	September 30,
(Millions of dollars)	2017		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic equity securities	$	716	$	716	$	—	$	—
Foreign equity securities		310		310		—		—
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries		175		173		2		—
High yield securities		86		20		66		—
Money market funds held in trading accounts		36		36		—		—
Collateralized loan obligations		29		—		29		—
Other trading securities		6		5		1		—
Trading securities – other current assets:
Domestic equity securities		38		38		—		—
Foreign equity securities		5		5		—		—
Fixed income mutual funds		4		4		—		—
Other		2		2		—		—
Derivatives:
Commodities (1)		3		3		—		—
Foreign currencies		4		—		4		—
Total Assets	$	1,414	$	1,312	$	102	$	—
Liabilities:
Derivatives:
Commodities (1)	$	2	$	2	$	—	$	—
Interest rate swaps		3		—		3		—
Total Liabilities	$	5	$	2	$	3	$	—

⁽¹⁾ Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of September 30, 2017, the commodity derivatives had a margin account balance of $16 million resulting in a net other current asset in the condensed consolidated balance sheet of $17 million.

The following table shows assets and liabilities measured at fair value on a recurring basis as of December 31, 2016, and also the level within the fair value hierarchy used to measure each category of assets and liabilities.

	Balance
	December 31,
(Millions of dollars)	2016		Level 1		Level 2		Level 3
Assets:
Trading securities – short-term investments:
Domestic equity securities	$	482	$	482	$	—	$	—
Domestic debt securities held in mutual funds/ETFs/U.S. Treasuries		437		437		—		—
Foreign equity securities		199		199		—		—
High yield securities		115		15		100		—
Collateralized loan obligations		26		—		26		—
Money market funds held in trading accounts		13		13		—		—
Other trading securities		5		5		—		—
Trading securities – other current assets:
Domestic equity securities		30		30		—		—
Foreign equity securities		3		3		—		—
Fixed income mutual funds		3		3		—		—
Other		4		4		—		—
Derivatives:
Commodities (1)		3		3		—		—
Foreign currencies		1		—		1		—
Total Assets	$	1,321	$	1,194	$	127	$	—
Liabilities:
Derivatives:
Commodities (1)	$	1	$	1	$	—	$	—
Interest rate swaps		4		—		4		—
Foreign currencies		4		—		4		—
Total Liabilities	$	9	$	1	$	8	$	—

⁽¹⁾ Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of December 31, 2016, the commodity derivatives had a margin account balance of $10 million resulting in a net other current asset in the condensed consolidated balance sheet of $12 million.

Schedule of gain or (loss) recognized for each type of derivative and its location in the condensed consolidated statements of comprehensive income

		Three Months Ended				Nine Months Ended
		September 30,		October 1,		September 30,		October 1,
(Millions of dollars)		2017		2016		2017		2016
Commodities	Cost of sales	$	(6)	$	(14)	$	(5)	$	17
Foreign currencies	Cost of sales		2		(12)		(3)		(25)
Foreign currencies	Foreign currency gains, net		(1)		—		(2)		—
Interest rate swaps	Miscellaneous, net		—		1		—		(3)

Schedule of fair value of each type of derivative and its location in the condensed consolidated balance sheets

		Asset Derivatives					Liability Derivatives
		September 30,		December 31,			September 30,		December 31,
(Millions of dollars)		2017		2016			2017		2016
Commodities(1)	Other current assets	$	3	$	3	Other current liabilities	$	2	$	1
Foreign currencies	Other current assets		4		1	Other current liabilities		—		4
Interest rate swaps	Other current assets		—		—	Other current liabilities		3		4

Seaboard’s commodity derivative assets and liabilities are presented in the condensed consolidated balance sheets on a net basis, including netting the derivatives with the related margin accounts. As of September 30, 2017 and December 31, 2016, the commodity derivatives had a margin account balance of $16 million and $10 million, respectively, resulting in a net other current asset in the condensed consolidated balance sheets of $17 million and $12 million, respectively.